U.S. oil companies slash Gulf of Mexico production as storm bears down
HOUSTON (Reuters) - U.S. oil producers on Wednesday cut nearly a third of Gulf of Mexico crude output as what could be one of the first major storms of the Atlantic hurricane season threatened offshore oil production and began soaking Louisiana with heavy rains.
Fifteen production platforms and four rigs were evacuated in the north central Gulf of Mexico, according to a U.S. regulatoras oil firms moved workers to safety ahead of a storm expected to become a hurricane by Friday.
The withdrawals helped push U.S. oil futures up 4.5% to $60.43 a barrel on Wednesday, and lifted gasoline futures more than 4% to the highest price since late May. The U.S. Gulf of Mexico produces 17% of U.S. crude oil and 5% of natural gas.
As the potential hurricane, to be named Barry, approached Louisiana, Governor John Bel Edwards on Wednesday declared a state of emergency, warning that up to 15 inches (38 cm) of rain could fall on parts of the Gulf Coast state. New Orleans was under a flash flood warning after receiving about 8 inches of rain early in the day.
Vermilion Parish, a coastal community, called for residents of some low-lying areas to evacuate.
A tropical depression is expected to form in the Gulf by Thursday, with the potential to strengthen to a hurricane by the weekend, according to the National Hurricane Center. The system could produce a storm surge and heavy rainfall from Louisiana to the upper Texas coast.
The storm could drop up to 12 inches of rain along the Central Gulf Coast through next week, with up to 18 inches falling in some areas.
Exxon Mobil Corp, ConocoPhillips, Anadarko Petroleum Corp and others withdrew staff, and some cut production from deepwater platforms as a safety precaution.
The U.S. Bureau of Safety and Environmental Enforcement (BSEE), which regulates offshore drilling, said more than 600,000 barrels per day of Gulf oil production and 17% of the region’s natural gas production were shut by producers by Wednesday morning.
Exxon has evacuated nonessential staff from three platforms in the Gulf, but anticipates little effect on its production, spokeswoman Julie King said.